Hero Honda defies industry trend to post 50 percent jump in net profit in Q2 FY09

The two-wheeler major's net profit after tax stood at Rs.306.30 crore, up from Rs.204.33 crore posted in the corresponding period last year (year-on-year or YoY rise of 49.90 percent).

During the period under review, the company's total turnover grew from Rs.2361 crore to Rs.3202 crore (YoY gain of 35.62 percent) while its net sales grew from Rs.2352.09 crore to Rs.3189.71 crore (YoY rise of 35.61 percent).

The company has recorded an EBIDTA margin of 13.58 percent in the September quarter. The EBIDTA margin in the previous quarter (April - June 2008) was 12.20 percent.

"The strong financial performance is in line with the company's better-than-industry top line growth. After posting a growth 11.38 percent in the first quarter, the company kicked off the second quarter with a 39.8 percent growth in sales in the month of July, and followed up with 26.8 percent growth in August and 22.4 percent in September. Hero Honda consistently keeps growing its share in the domestic motorcycle market, and currently enjoys over 55 percent share," the company said in a statement.

The company has captured majority of the market share nearly across all segments with CD Deluxe (entry segment), Glamour, the new Splendor NXG, Splendor + and Passion Plus (deluxe segment), and Hunk, CBZ X-treme and Karizma (premium segment) driving its growth story.

Despite credit squeeze and slowdown of demand, the company's cumulative sales for the September quarter of FY09 stood at 9,72,095 units - a growth of 28.5 percent over the corresponding quarter of last year (FY08).

"We are happy with our financial performance. It gives immense joy to see this kind of results in the 25th year of our company. I wish to thank all our stakeholders – customers, associates, dealer friends, ancillaries and also our joint venture partners Honda Motors Co – for their continuous support," said Dr. Brij Mohan Lall, chairman, Hero Honda Motors Ltd.

According to Pawan Munjal, managing director and CEO, Hero Honda Motors Ltd, despite volatile and competitive environment, the company's "top line continues to outpace the industry growth."

"The company's topline as well as bottomline have seen a healthy growth mainly on account of growth in volume and the cost discipline within the company during this fiscal, besides our focus on customers' need and expansion of our dealer network," Munjal said.